These Are Silver Linings?
According to Benjamin Gedan‘s story in today’s Projo, the “Current Conditions Index” compiled by URI Economics Professor Leonard Lardaro, a combination of 12 different indicators that measure the strength of the Rhode Island Economy, reached a value of zero in March for only the fourth time in its history. The index is down from a value of 8 in February. Any value below 50 indicates an economy in recession. The Current Conditions Index hasn’t been above 50 since July of 2007.
However, according to Professor Lardaro himself, the news might not be all bad; we might be about to start a recovery…
Twenty-one grueling months later, Lardaro said he is now expecting to see a “growth bounce.” The recovery, he said, although unlikely to be rapid, will be helped by the federal stimulus, which Governor Carcieri says has done little to spark economic activity in Rhode Island.However, the set of specific indicators that Gedan cites as possibly indicative that things may be ready to improve aren’t really the most confidence inspiring…
“We’re still in a very serious recession here,” Lardaro said. But, he added, “you’ve got to look at momentum.”
“We’ve taken such a beating, for such a long time, things are finally leveling out,” Lardaro said. “We’re not in a recovery. We’re starting a process of a recovery.”
Although 7 of the 12 indicators worsened compared with a year ago, the same number either improved or were stable compared with February. Loses in government jobs slowed; permits for new houses shot up with the annual rate rising to 518 from 297; and the labor force did not register a major decline, meaning that fewer unemployed residents are abandoning their job searches.So unemployment held steady, while the size of labor force stayed the same and losses in government jobs “slowed” — suggesting that losses in private sector jobs didn’t. If that’s the peak of the good news, exactly how strong of a recovery are we expecting?
The state’s jobless rate, although still devastatingly high, held steady at 10.5 percent in March, “a big moral victory,” Lardaro said.